Halliburton Employees Nationwide Gain in Overtime Settlement

Wage and hour overtime violations by employers are probably more common than ever detected by the U.S. Department of Labor. Employers have obligations to follow the Fair Labor Standards Act and to self-monitor their compliance. The regulations that permit the exemption of certain employees from overtime requirements can be hard to interpret and apply. So what does an employer do when it discovers it has been violating the Act?

Halliburton, the oil and gas drilling giant, recently self-reported to the DOL that it had misclassified over 1,000 of its more than 70,000 employees as exempt from overtime. The result was an $18.3 million settlement with the federal agency.

The employer had inappropriately denied overtime to the employees under the administrative exemption, which requires that such employees be paid at least $455 per week and perform administrative, professional, executive, or outside sales duties with certain attributes. Halliburton had apparently relied primarily on the salary aspect of the requirements to classify the employees.

The penalties that may be assessed are:

Unpaid overtime for two years (three years if a willful violation);

Liquidated damages no more than the amount of the unpaid overtime;

Civil penalties of no more than $1,100 times the number of employees affected if involving a repeated or willful violation; and

Costs and attorneys’ fees in a civil action.

In Halliburton’s case, it was not indicated whether liquidated damages or civil penalties were assessed. Because the company discovered the violations in a self-audit and subsequently self-reported, it is unlikely its violations were considered willful.

Employees who are paid on a salary rather than an hourly basis should be aware that this does not always mean they are exempt from overtime compensation. The salary amount specified in the federal regulations is very outdated. Consequently, employees who meet that part of the exemption requirements could very well be performing routine duties that would not meet the other requirements. Contact us today to speak with an experienced wage and hour attorney in California.

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